Should new video games cost $49.99?

[Anthony1]

I know that this topic has been pondered alot, but with the recent drop in music CD and DVD prices, I thought that maybe we could take another look at it.


Ok, music CD's are selling now in the $11.99 and $9.99 range, DVD movies are selling in the $17.99 and $14.99 range. Typically, of course. Sure there are lots of music CD's and DVD movies that sell for quite a bit more, but I'm talking about typical prices.


So with Music CD's and DVD movies selling for so cheap, why are brand new video games still going for $49.99?



My personal belief on this is that it is a combination of a number of factors. No.1, video game publishers feel that consumers think that $49.99 is a fair price, they think that is what they have to pay, and they continue paying it. No. 2, development costs have risen dramatically over the years. What used to take a team of 8 or 14 people to make, now takes 50 people or more to develop. No. 3, with so much fierce competition in the industry now, and so many companies fighting over the same market share, marketing becomes a huge factor and it's very expensive to market your product properly. I'm sure E.A. spends ridiculous amounts on marketing, but they also are always the sales leaders too.

But I honestly feel that new video games should cost in the neighborhood of $34.99, $29.99 and $24.99 brand new. I know if that was the case, I would buy triple the amount of games that I'm buying now. But obviously, the focus groups and think tanks in the industry disagree. They must feel that even if they lower the price, that consumers won't actually buy any more games. So they might as well keep prices high, if they aren't going to double sales.

[Evil E]

it's highway robbery!! 8-)

[Half Japanese]

I just have one thing that should be considered as far as DVDs go:

Most DVDs have already had a theatrical release that helps to offset the cost of production, and there is really no equal to this in game development/release.


There's a phrase that goes something like "what the market will bear" and the CD market has been pushing that for years, and the game market has likely been doing the same. However, you have to consider that as some games are getting more realistic and cinematic in their development costs rise. On one han you have voice actors to pay (big names tend to draw a little more attention to a game), as well as a slew of programmers and artists to make sure that everything is running as smooth as possible (much harder these days I imagine than it was even ten years ago). Personally, I have no problem with the current price. That's not to say I wouldn't crap my pants if all games dropped to $20 or less by tomorrow, but I feel that for all of the people involved who have families to feed and provide for, it's not really asking a dramatic amount of money. Then again, give us an experience worthy of our hard-earned $50! But then again, I'm one of the (apparently) few who still pays for music.....

[Delgrace]

I don't really mind the prices of videogames, because hey, you can just wait and anything will pretty much fall a couple of bucks. Still, $100 AUS is pretty hard to swallow sometimes, so I rarely buy ONE new game a year, let alone more.

What I do not agree with, though, are the prices of GBA carts. New releases are $70 AUS. That's insane! Why pay that when you could just go another $30 and get a new release on one of the home consoles?

[hydr0x]

OMG $50 only???? they are 60 EURO here in germany, thats about $65, so PLEASE shut the fuck up :p

[maxlords]

The cost of making a game is WAY higher than ever, and the company that made it only gets part of that money. We see three price hikes on the average game. Manufacturer's cost, then a hike for hte wholesaler, then ANOTHER hike for the retailer. So you're paying 2 middleman's fees on top of the cost of a game, and the cost of the game has to pay EvERY programmer's salary (unless they work for a big company like Capcom or Konami or Square). But figure that that money pays everyone that worked on the game for a whole year or more.

Personally, I think think that they should be around $40, not $50, and a lot of gamers are starting to go to the $40 mark, just because the sheer quantity of games out means that people can buy less at $50, and the DVD/CD media is MUCH cheaper than carts so they save money that way. It's about what we've always paid and I don't think it's too bad unless a game is complete shite.

[lendelin]

OMG $50 only???? they are 60 EURO here in germany, thats about $65, so PLEASE shut the fuck up :p

You poor Germans, I feel so sorry for you...and then all these games which come with a 5 month delay. :) On the other hand, you have better and much more soccer games. :) ...and...the PAL system which has a better resolution than NTSC. So, don't complain, German boy. :)

[Kid Ice]

I wouldn't go as far as to say I have a problem with the prices of the games, but I very rarely buy a game brand new. In fact, I've only purchased one game at full price in the last 2 years. I'm usually content to wait until the games drop in price. In a sense, something is wrong if they can't get a guy like me to buy their new games, and I would buy many more games if they came out at 30 bucks. However, someone must be buying them (and a lot of them) because they have been priced this way for years. I can remember about 10 years ago getting my girlfriend to buy me Zero Tolerance for Gensis; it was 69.99!

Another factor for me personally is ebay. Whenever I'm at the game store thinking about dropping a fifty on a brand new game, I have to consider how much that same 50 bucks would get me on ebay.

[Griking]

I think you left out a voting choice

X Because dumb people are willing to pay it.

[Zaxxon]

You're also forgetting that the game companies have to pay huge royalty fees from each game just to be able to make a game for a system. I had read on PSX games it was $12 and on GB games it was around there also. Think about that. Right off the bat $12 of profit is being eaten up by a royalty from every copy sold. They also have to pay big money for premium shelf space to stores like EB if they want their game displayed where people will see it.

What's driving up game prices the most IMO in this day and age of dirt cheap storage media like DVD's is that games are made waaaaaay too long and too complex. They feel they need to make every game take a month or more out of your life to complete to justify the high price tag. To make their game that long and complex they need to hire more programmers and artists which drives up development costs. They also feel they need to have one or several of those now boring CGI cinemas to intro every game and intro every level. These have got to be very expensive to produce. Who actually want to sit through those more than once? I can't stand those even the first time. They totally break the flow of the game and take you of the game world. Those are sooo unnecessary. It's now a vicous cycle they created.

They could sell games for $20 new if the cut out all the crap, made games a reasonable length and the royalty rates were reduced to sane levels.

[hezeuschrist]

I think the biggest factor now is the development costs. I remember reading an article that someone posted here about the potential cost of development for the next generation of system, and for the big games (GTA, Gran Tourismo, next Tekken/Soul Calibur, Halo, ect) it could cost upwards of 20 million dollars to produce the game.

That's a hell of a lot of money.

[bargora]

Yesterday on Gamefaqs.com the Poll Of The Day asked gamerz about how many used games they buy. At the time I voted, only 8% said that they buy more used games than new, and another 15% said that they even had a decent number of used games in their collection.

Now maybe gamefaqs is skewed toward the younger crowd that receives most games new as gifts (either for specific occasions or on whiny demand), rather than doling out their own scratch for teh gamez, but I am still astonished that only 8% buy used games more often than new. Unless the poll is somehow skewed by computer gamers, since there's really no B&M retail channel that I've seen for PC/Mac games.

They can charge whatever they want, but the only game I know of that I'm going to buy full price new in the next year is Steel Battalion: Line of Contact. And if I die before GTA: Criminal Bowel Movement drops to $20, then oh well.

[zmeston]

Here's an educational article about why the price of triple-A videogames may soon be rising to $60: http://www.msnbc.com/news/924871.asp?cp1=1

And my own observations:

* As mentioned earlier in this thread, toward the end of the cartridge era, a considerable number of games were retailing for more than $50: Phantasy Star IV, Zero Tolerance, etc.

* Sony's first-party titles usually cost $40 (SOCOM being a notable exception), since they don't have to pay the hardware royalty fee.

* Many more games are coming out at sub-$50 price points than just a few years ago. And not just the $10 budget titles and Greatest Hits re-releases, but brand-new and very decent games: Road Trip, Evil Dead: FoB, Big Mutha Truckers, Magic Pengel, Bombastic, etc.

* You can't compare CD and DVD prices to videogame prices. (Well, you can, but you'd be silly to do so.) There are wildly different factors involved in their production and pricing. Apples and oranges.

-- Z.

[Raedon]

Stay 1 year behind in games and save.. 1) a year of reviews will tell you a LOT. 2) You will find it for $10-20.

And yes, games were overpriced.. A SNES game costing $50? That was hard to swallow then, now at least you can tell there was a production team of more then 10 people.

From what I have seen in the last five years the trend has been for people to pirate games, PC especially.. The games that get the big sales are the ones that are online multiplayer and require a online serial code.

Lol, that reminds me of something I saw at Target about 6 months ago, I saw a kid open a UT2k3 and write down the Serial.. Didn't take anything out of the store but a piece of paper.

[ubersaurus]

It's waaay better then paying 80 bucks for a new SNES game back in the day ;p

Plus I buy so few games brand new, it doesn't bug me too much.

[kainemaxwell]

$40-$50's alot fairer then $50-$70 back during the Nintendo and Sega wars days.

[lendelin]

Here's an educational article about why the price of triple-A videogames may soon be rising to $60: http://www.msnbc.com/news/924871.asp?cp1=1

And my own observations:

* As mentioned earlier in this thread, toward the end of the cartridge era, a considerable number of games were retailing for more than $50: Phantasy Star IV, Zero Tolerance, etc.

* Sony's first-party titles usually cost $40 (SOCOM being a notable exception), since they don't have to pay the hardware royalty fee.

* Many more games are coming out at sub-$50 price points than just a few years ago. And not just the $10 budget titles and Greatest Hits re-releases, but brand-new and very decent games: Road Trip, Evil Dead: FoB, Big Mutha Truckers, Magic Pengel, Bombastic, etc.

* You can't compare CD and DVD prices to videogame prices. (Well, you can, but you'd be silly to do so.) There are wildly different factors involved in their production and pricing. Apples and oranges.

-- Z.

I think the quoted article simplifies a lot and is inconsistent. The highpoint: "Pachter, the Webush Morgan analyst, believes that publishers just don’t know any better.
“Game publishers don’t understand consumers, they understand video games,” he said. “Prices never go down. People don’t have a problem with prices going up, the publishers do.”

Holy cow! That's one of the dumbest things I ever heard. Neither Publishers nor consumers live in lala land. Almost evreyone has a limited budget, and not only we videogame nuts are price conscious, but also a family with three kids. If the avareage retail price for new releases goes up to $60, sales will go down for sure, and publishers know that better than Mr. Pachter.

The credo of this article is, development costs of games will rise, therefore prices will go up. Sounds like a justification of publishers to get the price up. Nope, won't happen.

- the competition prohibits such a uniform price increase. I don't think that Nintendo would follow suit a price increase by Sony and Microsoft. GC games which look suddenly more attractive for the consumer becasue of a lower price tag? I think they wouldn't have something against it, in particular when often the same game is realeased for two or three systems.
...and why did we see a constant price drop for the harware if not for the competition?

- the more games you sell, the lower the profit rate can be for an individual game. I can't see an increase in an expanding market where more and more games are sold.

- didn't Nintendo cut their losses for a lot of games for the N64 with a lower price tag because PS1 games were cheaper? Again, competition keeps the prices down.

- the article presents developers/publishers almost as victims. Here we are, the games cost more and more to develop, so...we just HAVE to increase the price for new releases. Poor guys. They have to come to grips with development costs and realistic expecatations for sales and calculate accordingly, and THEY DO!! If Shiny wouldn't have had expected sales figures for Enter the matrix which ends up with profits despite the millions for the Wachofski brothers, they wouldn't have spend money for the license and the money for the directors. If developers are forced to cut development costs due to market change, they sure can, and they KNOW HOW!!

Thank goodnes there is the last paragraph. :)

Ultimately, a price increase may rest with the customers. If one publisher sells a hot new title for 60 a pop and makes a killing, publishers with similar titles may follow. But if consumers determine that the gameplay can’t match the price hike. ... Well, hell hath no fury like a gamer spurned.

As long as game sales go up or even stagnate, we won't see a price increase due to competition...which means an increase of rational consumer behavior which chooses the cheapest item. We never saw so many very good games drop so fast to such low prices. Additionally, adjust the tables of the articles for inflation and purchasing power, and you'll see we get new released games nowadays around 40% cheaper than to the best SNES times. Current games were never so cheap, good for us players, and developers/publishers still make more profit than ever before, good for them.

[Sylentwulf]

Companies charge what people are willing to pay, plain and simple. If enough people thought $50 was too much, then noone would be buying them for $50, and they wouldn't be released at $50.

Personally, I DON'T pay $50. I have a nice setup going where I stay one year behind the videogame industry, even on sports games. I buy my games for either used/mint/complete, or new about a year after they come out for around $20 including shipping.

The only exceptions to this are:
Final Fantasy games (Up until now, FFX has ruined this for me, and I probably won't buy any more on release day)
EXCEPTIONAL games that WILL retain their value. Not many of these come around, and I usually wait a month or 2 to make SURE it won't lose value.

[zmeston]

Holy cow! That's one of the dumbest things I ever heard. Neither Publishers nor consumers live in lala land. Almost evreyone has a limited budget, and not only we videogame nuts are price conscious, but also a family with three kids. If the avareage retail price for new releases goes up to $60, sales will go down for sure, and publishers know that better than Mr. Pachter.

SOCOM, mentioned in the article by Pachter, has sold through more than a million units despite its $60 MSRP. Also, not all new releases would (will) move up to $60, just the triple-A stuff. Many publishers are already releasing games with modest production values at sub-$50 price points. Big Mutha Truckers would be a poor buy at $50; it's an excellent buy at $20, a price point totally in line with the amount of entertainment it provides.

Publishers who DON'T know how to properly price their games will suffer -- such as Eidos, which released Mister Mosquito and Mad Maestro! at $50, when they should've shipped at $30, tops.


...and why did we see a constant price drop for the harware if not for the competition?

Software and hardware are entirely different beasts; all the money is made by the former, which encourages console makers to market the latter as cheaply as possible.

-- Z.

[AB Positive]

Even working at Gamestop, I only bought two new games so far this year: Soul Calibur 2 and FF Tactics Advance. I don't have a problem with the $50 tag, but I need to make sure that I'm going to get that $50 of value.

The -systems- on the other hand, I won't ever buy new on release day again. Too much god damn money. And what if I don't like it's lineup after a year or so? *coughXBOXcough*.

Software, no problem. Hardware, I have issues but it can't be avoided as companies lose a lot on the hardware anyway.

-AG

[lendelin]

...and why did we see a constant price drop for the harware if not for the competition?

Software and hardware are entirely different beasts; all the money is made by the former, which encourages console makers to market the latter as cheaply as possible.

-- Z.

I'm aware that money is made with games, and games only. Still, the basic rule 'price drop results in more sales' all other things being equal applies also for hardware. Why else would the three powerhouses drop their prices?


SOCOM, mentioned in the article by Pachter, has sold through more than a million units despite its $60 MSRP. Also, not all new releases would (will) move up to $60, just the triple-A stuff. Many publishers are already releasing games with modest production values at sub-$50 price points. Big Mutha Truckers would be a poor buy at $50; it's an excellent buy at $20, a price point totally in line with the amount of entertainment it provides.

Socom is an exception because of it's online atttractivity and the lil' one dollar headset. I heavily doubt that even for the high in demand new releases a $60 price tag would work. (meaning the higher profit rate outweighs the lesser sales) The reason is that there are too many good games to choose from, and games drop in price really fast. The market is saturated. Terribly saturated. The times are over in which Square could charge $80 for a Final Fantasy 3, no game is to such an extent an 'event' anymore due to the competition.

Like most of you I bought only one game this year as a new release, and that was Zelda WW as a preorder. For all the other (first-rate) games I spend about $22 on average. I didn't buy Sunshine yet, Starfox Adventures, or Pikmin becasue of the prices from $30-$50. If there are more first rate games out there than someone can possibly play, you can sit back and watch the prices drop. I will spend $50 for Gran Turismo, though; however, I won't spend $60 although I love this game. The reason: consumers are getting used to a certain price level, and a price increase for a normal game is a big risk in particular if the competition is fierce. The risk of a price increase even for the 'hot stuff' is even bigger if other games are released below $50, and older great games sit on the shelves for $20-$30; and we know, that's the case today.

However, enjoy this sentence like bad food: "Prices never go down. People don't have a problem with prices going up, the publishers do." LOL Damn, how can someone in his right mind say something like this, except he has an agenda. If people wouldn't care about prices, the price tag for games would be $200 right now; and "prices never go down?" Geez, that would be paradise for developers/publishers, and hell for us. Thank goodness that's not the case, and never will be in normal times. The new release prices for the N64 went down, and the reason is the same which will keep the price at $50 for the current systems, namely competition.

[zmeston]

I'm aware that money is made with games, and games only. Still, the basic rule 'price drop results in more sales' all other things being equal applies also for hardware. Why else would the three powerhouses drop their prices?

Actually, Sony DOES make money on PS2 sales, thanks to its internal hardware development and production, while the outsourcing Nintendo and Microsoft do not. I should've been clearer about that.

Hardware prices drop because the hardware becomes cheaper to manufacture over time, and to kick-start hardware sales if they're flattening. A lot of people were disappointed that Sony didn't drop the PS2 to $149 at E3, but they didn't need to, as the PS2 continues to outsell the competition by outrageous ratios. The current $179 PS2/Network Adaptor bundle is a tremendous deal, and deservedly selling like mad.

And I would definitely NOT classify Nintendo, in its current position in the home-console field, as a "powerhouse." Nor Microsoft, really. Both companies are, in terms of sales, being pummeled by Sony.


Socom is an exception because of it's online atttractivity and the lil' one dollar headset. I heavily doubt that even for the high in demand new releases a $60 price tag would work. (meaning the higher profit rate outweighs the lesser sales) The reason is that there are too many good games to choose from, and games drop in price really fast. The market is saturated. Terribly saturated. The times are over in which Square could charge $80 for a Final Fantasy 3, no game is to such an extent an 'event' anymore due to the competition.

SOCOM isn't an exception; SOCOM is a first step.

You don't think that Rockstar could charge $60 for the next Grand Theft Auto, and sell just as many copies as they would at $50? I absolutely do.

Square charged $80 for FFIII because cartridges were incredibly expensive to produce at that time, and because Nintendo's royalties were punitive at that time.


Like most of you I bought only one game this year as a new release, and that was Zelda WW as a preorder. For all the other (first-rate) games I spend about $22 on average. I didn't buy Sunshine yet, Starfox Adventures, or Pikmin becasue of the prices from $30-$50. If there are more first rate games out there than someone can possibly play, you can sit back and watch the prices drop. I will spend $50 for Gran Turismo, though; however, I won't spend $60 although I love this game. The reason: [b]consumers are getting used to a certain price level, and a price increase for a normal game is a big risk in particular if the competition is fierce.

First thing: the majority of consumers ONLY buy the first-rate, triple-A games. That's why they hog the majority of sales, and all the other titles scramble. Cream rises to the top.

Second thing: We're not talking about "normal" games at $60; we're talking about double-A and triple-A titles from third parties.

Also if you're talking about inter-console competition, there is none; Sony has ruled all for a decade and counting. If you're talking competition within the PS2 library, as previously mentioned, a relative handful of triple-A games sell the majority of units -- and those are the games mostly likely to go up in price, since their price hikes can be most easily justified.


However, enjoy this sentence like bad food: "Prices never go down. People don't have a problem with prices going up, the publishers do." LOL Damn, how can someone in his right mind say something like this, except he has an agenda. If people wouldn't care about prices, the price tag for games would be $200 right now; and "prices never go down?" Geez, that would be paradise for developers/publishers, and hell for us. Thank goodness that's not the case, and never will be in normal times. The new release prices for the N64 went down, and the reason is the same which will keep the price at $50 for the current systems, namely competition.

The gentleman you quote didn't say that prices quadruple; he just said they go up, and of course they do. Book prices go up, movie prices go up, food prices go up. And so will the prices of certain high-profile games -- maybe not in the PS2 era, but certainly in the PS3 era.

-- Z.

[maxlords]

Ok....wow, a lot of arguments, and very good ones. My thoughts:


You can't compare CD and DVD prices to videogame prices. (Well, you can, but you'd be silly to do so.) There are wildly different factors involved in their production and pricing. Apples and oranges.

True. But you CAN compare CD/DVD media prices to cart media prices for games, and overall, the media is lowering the prices, but could lower it more.


Stay 1 year behind in games and save.. 1) a year of reviews will tell you a LOT. 2) You will find it for $10-20.

Not a good idea lately though! That's great if you want AA or AAA titles, but for the smaller releases, you'll end up shooting yourself in the foot. A lot of the lower print runs are vanishing off shelves VERY quickly, expecialy stuff like Bombastic and Disgaea and Wizardry and Fatal Frame. Lower print runs, and the stores like EB aren't stocking them due to their "preorders are an indicator of in store sales" policies. If you collect bigger releases, like the GTA games and Zelda and stuff like that, no problem. But when you collect the smaller, almost unadvertised releases, the stores are only getting on 1-5 copies and no restocks, and in a year, you won't find the games at ALL! I had a HELL of a time tracking down a copy of Wizardry for PS2, as well as a couple others. And I find that even when a game gets bad reviews, sometimes I like it. Don't trust the reviewer, trust yourself. If you don't want to risk it, rent it.


Even working at Gamestop, I only bought two new games so far this year: Soul Calibur 2 and FF Tactics Advance. I don't have a problem with the $50 tag, but I need to make sure that I'm going to get that $50 of value.

Wow. I still buy WAY more used games than new, but so far this year I've bought 15 or 16 new titles, and have a couple more preordered. I buy them new because I like to have mint games, and you RARELY find used games in pristine mint condition, especially with EB/Gamestop.


Actually, Sony DOES make money on PS2 sales, thanks to its internal hardware development and production, while the outsourcing Nintendo and Microsoft do not. I should've been clearer about that.

First thing: the majority of consumers ONLY buy the first-rate, triple-A games. That's why they hog the majority of sales, and all the other titles scramble. Cream rises to the top.

Second thing: We're not talking about "normal" games at $60; we're talking about double-A and triple-A titles from third parties.

Yes, Sony makes money on hardware sales, but they also have the highest failure rate of any system. HORRIBLE internal hardware! But people buy tit anyway, KNOWING that it's more likely to fail by far, because there are so many games for the system! I like the PS2 least of all of the systems for this generation, but I have the most games for it because the games are overall better (much as I hate to admit it).

And yes, the majority of gamers are casual gamers and only buy the triple A titles. I on the other hand, rarely buy the triple A games and almost exclusively buy the more obscure stuff that sells poorly. But I know I'm the exception to the rule here :)

And for obscure double and triple A titles, I'd happily pay $60 if it's something I wanted.

[christianscott27]

i'll buy at new prices for a trusted franchise game such as the next medal of honor game, thats it. i'm in the stay behind a year camp, there are so many games i want to try its not hard to forget the latest greatest and go with a good looking $15 game. of course this doesnt always work, i still have yet to play vice city, even used copies are still over $30. being a retrogamer gives me prespective, those $50 dollar SNES games are now mine for $5...same thing with my dreamcast experience, it killed me to see games i dropped $50 on going for $10 a year later. i used to read all the game magazines, EGM, PSM, and Next generation- when iwas doing that the hype and anticipation used to make me pre-order and buy new a lot, after getting bummed by fear factor and dino crisis i quit that.

[Raedon]

Ok....wow, a lot of arguments, and very good ones. My thoughts:


Stay 1 year behind in games and save.. 1) a year of reviews will tell you a LOT. 2) You will find it for $10-20.

Not a good idea lately though! That's great if you want AA or AAA titles, but for the smaller releases, you'll end up shooting yourself in the foot. A lot of the lower print runs are vanishing off shelves VERY quickly, expecialy stuff like Bombastic and Disgaea and Wizardry and Fatal Frame. Lower print runs, and the stores like EB aren't stocking them due to their "preorders are an indicator of in store sales" policies. If you collect bigger releases, like the GTA games and Zelda and stuff like that, no problem. But when you collect the smaller, almost unadvertised releases, the stores are only getting on 1-5 copies and no restocks, and in a year, you won't find the games at ALL! I had a HELL of a time tracking down a copy of Wizardry for PS2, as well as a couple others. And I find that even when a game gets bad reviews, sometimes I like it. Don't trust the reviewer, trust yourself. If you don't want to risk it, rent it.

This is assuming I collect for newer (or any CD/DVD) system.. which I don't. XD

[lendelin]

zmeston:

Actually, Sony DOES make money on PS2 sales, thanks to its internal hardware development and production, while the outsourcing Nintendo and Microsoft do not. I should've been clearer about that.
Sure, and Nintendo made profits with their hardware until one year around after the N64 release; but we all know that the real money is in the games for hardware manufacturers.

Still, the competitive environment is key when it comes to hardware price drops, not cheaper manufacturing costs as you claim:

Hardware prices drop because the hardware becomes cheaper to manufacture over time, and to kick-start hardware sales if they're flattening. A lot of people were disappointed that Sony didn't drop the PS2 to $149 at E3, but they didn't need to, as the PS2 continues to outsell the competition by outrageous ratios. The current $179 PS2/Network Adaptor bundle is a tremendous deal, and deservedly selling like mad.

Exactly! Even cheaper manufacturing costs couldn't get Sony to drop the PS2 price right away because they could afford to wait due to their dominating position. The state of the competition is key. The price drop came, but later, still, they were forced to a price drop in the long run because of the competition. Sony would charge still $300 with slightly less manufacturing costs if they could. I never knew a firm which refused a bigger profit if they could make it.


And I would definitely NOT classify Nintendo, in its current position in the home- console field, as a "powerhouse." Nor Microsoft, really. Both companies are, in terms of sales, being pummeled by Sony.

I would. I know how many more PS2s are out there than Xboxes and GCs, still, the key is an ongoing fierce battle over marketshares. Nintendo is financially very sound thanks to their monopoly in the handheld market, and Microsoft is a big powerhouse thanks to their financial resources. Nintendo doesn't want to be relegated to a niche hardware manufacturer. MS want definitely the no.1 spot in the long run, invests a lot of money and can outlast current huge deficits. The console game market is where the money is, the PC game market lost in a landslide, and the great prospects for profit in the future let them dig constantly new starting holes.


SOCOM isn't an exception; SOCOM is a first step. You don't think that Rockstar could charge $60 for the next Grand Theft Auto, and sell just as many copies as they would at $50? I absolutely do.

First, they definitely would NOT sell as many copies with a $60 price tag compared to $50 all other things being equal. Sales for a more expensive product will be less all other things being equal. If that's not true, then you discovered a revolutionary new law in economics and deserve the Nobel prize. Even with the most frenzy about a product, sales will be less.

Second, the real question is, does the higher profit per individual game compensate for or outweigh the loss in total sales and this way you end up with an even bigger profit. We both are merely speculating here, but so do firms albeit with better socio-demographic data about consumer behavior.
To be honest, I think it might work out for THE two top selling games, Grand Theft Auto and Gran Turismo 4 because they have a big following. For the other great selling games I can't really see it. Onimusha 3, even for the big Final Fantasy or Halo with the starving FPS Xbox fan base, or for a Zelda WW it wouldn't work, I guess.

...and here are the reasons why I think the price increase even for the two hottest of the hottie games won't come, not to mention for other big sellers:

- a price increase is a risk; consumers including the hardcore base fan of a certain game are used to a certain price level, get spoiled, and are taken back if they are suddenly confronted with a higher price without the justification of slight (even fake) bonuses (like a one dollar headset which increases the price by ten dollars)

- alternatives for teenage/adult gamers and parents are plenty. Even exclusive triple A games for $60 would sit right next to new releases for $50 and $40, and they would sit right next to older triple A games for $30 and $20. Additionally, we know that as a rule (exceptions exist, I know) already for the third sequel of a series the attraction level goes down, the "new" factor and the "I can't wait for the sequel" factor are gone. This makes a price increase even a bigger risk (for the second sequel only!)

- in an industry with ever growing profits at the moment developers have enough leeway to reduce development costs if they have to; they can live even with less profits margins if there are forced due to competition, general economic change, internal structures (smaller-bigger developers, dependency on publishers, etc.)

- the market is expanding, AND the competition with a battle over market shares is there. The above limitations as well as the opportunities are well recognized by publishers. More and more games are sold, the expected profits are good, there is no need for publishers/developers to take an unnecessary risk like a price increase for triple AAA games.

- instead of taking the risk of a nominal price increase- shock for consumers, it is much smarter to go with the accustomed new release price, sell the game for 15 months at this level while the competitors have to drop the prices much faster. Gran Turismo 3 sold for a very long time for $50, and so did Grand Theft Auto 3 which still sold for $50 until Vice City was released. Maximo dropped to $20 three months after its release. This way you still can make big profits without taking the unnecessary risk of a nominal price increase.

- the prospects of a price increase for games in the long run for the next gen systems are also dim. The battle over market shares will be even fiercer, MS will shorten the distance to Sony, and Sony won't get a headstart for its next gen system for sure. Nintendo and MS learned their lesson, both couldn't catch up with Sony with very different strategies. resources and fanbase. In a very competitive environment price increases are unlikely.


The gentleman you quote didn't say that prices quadruple; he just said they go up, and of course they do. Book prices go up, movie prices go up, food prices go up. And so will the prices of certain high-profile games -- maybe not in the PS2 era, but certainly in the PS3 era.
I realized he referred to a $10 increase, and I didn't imply he refers to a $150 increase. The sentence "People don't have a problem with prices going up" is either wishful thinking, propaganda or just plain dumb. :) This would be the first time in history that people don't have a problem with a price increase facing one eternal thing in life - a limited budget. They might get used to it, they might accept it reluctantly, but that means that the obstacles I described have to be overcome.

Nope, the simple ‘higher development costs lead to price increases' isn't necessarily the case, at least not in the current situation and not in the near future. The expanding and competitive market makes it unlikely.

[RetroYoungen]

Even working at Gamestop, I only bought two new games so far this year: Soul Calibur 2 and FF Tactics Advance. I don't have a problem with the $50 tag, but I need to make sure that I'm going to get that $50 of value.

The -systems- on the other hand, I won't ever buy new on release day again. Too much god damn money. And what if I don't like it's lineup after a year or so? *coughXBOXcough*.

Software, no problem. Hardware, I have issues but it can't be avoided as companies lose a lot on the hardware anyway.

-AG

I hear you, brother.

I don't think games should be costing as much as they do now, $50 is a little high for a lot of people (take me, for example). If they were cheaper, say in the $30 range, I would be more tempted to pick up a new game here and there, even pre-order which I NEVER have done. This price tag is the reason why I buy pretty much everything in my collection used. I'll go to my Funco or my Software Etc. and I'll rummage though their older stuff (Genesis mostly, hopefully if they have some) and I'll pay the few dollars they ask for a game. But I stay away from brand-spankin'-new, unless it's a game I simply cannot live without. That's why I'll probably end up paying so much for that new TMNT game scheduled for mid- or late-October.

[zmeston]

Sure, and Nintendo made profits with their hardware until one year around after the N64 release; but we all know that the real money is in the games for hardware manufacturers.

No disagreement with the source of the real money.


Exactly! Even cheaper manufacturing costs couldn't get Sony to drop the PS2 price right away because they could afford to wait due to their dominating position.

Right -- because there's NO competition, not because there is.


I would. I know how many more PS2s are out there than Xboxes and GCs, still, the key is an ongoing fierce battle over marketshares. Nintendo is financially very sound thanks to their monopoly in the handheld market, and Microsoft is a big powerhouse thanks to their financial resources. Nintendo doesn't want to be relegated to a niche hardware manufacturer. MS want definitely the no.1 spot in the long run, invests a lot of money and can outlast current huge deficits.

Nintendo HAS been relegated, in the home-console market, to a niche manufacturer, and Microsoft's stockholders have been openly grumbling about the fact that the Xbox division is losing money. Yes, Microsoft can outlast huge deficits, but for how long will the people in charge tolerate throwing good money after bad?


First, they definitely would NOT sell as many copies with a $60 price tag compared to $50 all other things being equal. Sales for a more expensive product will be less all other things being equal.

I'm not claiming to have discovered any economic laws, just stating that I don't believe a $60 price point on GTA: Sin City (or whatever they decide to call it) would dissuade all but the very poorest gamers -- and videogames, as I've stated before, are not a hobby for the poor -- from purchasing it. And Rockstar would just pick them up later with a budget release (which they would probably do at $30 instead of $20).

I suppose I should try some basic and flawed math. Okay, so Vice City has sold roughly five million copies in North America at $50.

5,000,000 x 50 = 250,000,000

And if it had been $60:

5,000,000 x 60 = 300,000,000

So would an extra $10 drive away a million buyers, or two out of every ten?

4,000,000 x 60 = 240,000,000

Obviously, I'm not factoring in wholesale prices, Sony royalties, European sales, etc., etc. This is just a half-assed way of demonstrating that I don't see throngs of gamers bailing out over another $10. And once the triple-A titles open the door to higher prices, other games will follow suit.


- a price increase is a risk; consumers including the hardcore base fan of a certain game are used to a certain price level, get spoiled, and are taken back if they are suddenly confronted with a higher price without the justification of slight (even fake) bonuses (like a one dollar headset which increases the price by ten dollars)

You're right about the gimmickry justifying the price point, although the headset is genuinely useful and adds to the game. Back in the day, Psygnosis included a "free" T-shirt with the Amiga game Shadow of the Beast, which was also $10 higher than the norm.


- alternatives for teenage/adult gamers and parents are plenty. Even exclusive triple A games for $60 would sit right next to new releases for $50 and $40, and they would sit right next to older triple A games for $30 and $20. Additionally, we know that as a rule (exceptions exist, I know) already for the third sequel of a series the attraction level goes down, the "new" factor and the "I can't wait for the sequel" factor are gone. This makes a price increase even a bigger risk (for the second sequel only!)

I don't see how having a bunch of games on a wall, ranging in price from $60 to $20, will be radically different than a bunch of games on a wall, ranging in price from $50 to $20, as it is now.

Also, I've never heard of this second-sequel theory, which the combined examples of Super Mario Bros. 3 and Grand Theft Auto 3 would seem to totally disprove. Could you give some examples?


- the prospects of a price increase for games in the long run for the next gen systems are also dim. The battle over market shares will be even fiercer, MS will shorten the distance to Sony, and Sony won't get a headstart for its next gen system for sure. Nintendo and MS learned their lesson, both couldn't catch up with Sony with very different strategies. resources and fanbase. In a very competitive environment price increases are unlikely.

Do you mean that Microsoft will shorten the distance between it and Sony if it launches the Xbox 2 before Sony launches the PlayStation 3? Sega launched the Dreamcast before Sony launched the PS2, and infamously launched the Saturn before the PlayStation -- didn't help 'em any in either case.


Nope, the simple ‘higher development costs lead to price increases' isn't necessarily the case, at least not in the current situation and not in the near future. The expanding and competitive market makes it unlikely.

We agree to disagree, but I thank you for making very good points. And if the Xbox 2/PS3 era, with the gargantuan development costs it will entail, rolls by without one triple-A title (sans SOCOM-style gimmickry) shipping for $59.99, I'll gladly dine upon crow.

-- Z.

[lendelin]

@zmeston:
I'm glad that you showed flexibility in at least some issues; yep, a price increase for new releases for bestsellers is unlikely for the current systems, now you expect it more for the next gen systems; yep, you do loose actually sales if the price goes up; and, yep, the structure of the competition is key when hardware prices drop (for all competitors, fast ones and delayed ones), not slightly cheaper hardware manufacturing costs.

But you still hold adamantly to your first conviction that a price increase doesn't matter, or now, at least it doesn't matter ‘so' much. A $10 increase matters!!! Otherwise, we would have had this increase for over a year now, trust me. Consumers are overall very rational...when it comes to the pocketbook and you have choices, even the loyal fanboys admit their limits.

Let me cut to the beef, I didn't hear anything substantial about my list of limiations, other things are minor quibbles and quabbles.

At least you say now that the "very poorest" of the gamers would bail out. Nope, not only the very poorest would do that. We both don't have exact and reliable data about consumer behavior, however, just using common sense, in particular the best of the best selling games have a widespread appeal not only for frequent gamers but also for casual gamers. Do you really think a $10 increase doesn't matter to me who has a good job, is a passionate gamer, but also has to maintain a house and puts money in his retirement account? I have lots of friends who are casual gamers, have families, a daughter will go to College next year, the other daughter is 14, and the son who wants games once in a while is 9 years old. My friend certainly looks for games who are $10 or $20 cheaper, and puts her foot down when the lil' critter HAS to have THIS game. :) Ten bucks matter to families, ten bucks matter to me because I spend a lot of money for games anyway , and ten dollars matter to casual gamers who have choices.

The bottom line is, if the consumer has choices a plenty of very good cheaper games within a system and across systems, and is accustomed to a certain price level, and you have leeway of development costs, you're not easily take the risk of a price increase. It's about uncertainty which can be easily avoided. If you would sell six million copies with a price tag of $50, and sell only five million with a price tag of $60 (and they would!), and you would come out roughly even, another strategy makes much more sense. You keep the accustomed price tag, you keep it for 15 months high up there instead of maybe being forced to put it down after six months to $50, and after another six months to $40. Take the psychology of the consumer into account. We know that the price tag of $50 for a Gran Turismo 4 will stay up there for a long time; if it's a $60 release, potential consumers might hesitate to buy it right away because they are speculating it will drop in price. The consumer behavior might change, you won't take this risk if it's not necessary...and all of this takes place while there are other good choices! Additionally, these are all sales estimates, nothing is written in stone, uncertainties are plenty (e..g. the freshness of Grand Theft Auto is gone (some complaints are already heard about Vice City), changes in tastes, another unexpected hot title shows up, slow down of the economy, decrease of purchasing power, etc)

If all what you can say is that even with a release price-increase you might make more profit, at least roughly the same, maybe even a bit less, why in the world would a firm take such a risk. They have to deal with uncertainties already, and are sometimes forced to take risk, they won't take unnecessary ones.

Don't fall for this simplistic ‘people don't care about prices going up, they are used to it' or ‘I don't see a difference between a price range from 60 to 20 to a price range from 50 to 20". Sony is the undisputed market leader, but they don't have a monopoly, in stark contrast, they face ambitious competitors.

...and if you refer to grumbling stock holders of MS, do you expect there won't be a Xbox 2? Grumbling can be very productive; and they can outsit deficits. Don't draw conveniently a dying Xbox on the wall. Isn't my assumption that MS will shorten the distance to Sony for the next gen system much more reasonable and therefore, the increased competition makes price increases even less likely for the next gen systems? MS as a newcomer is roughly on par with GC in the US and Europe already, they increased their reputation with good games already, let them be more successful in Japan, and they will put up a fight with Sony. The Xbox 2 won't be launched one year after the PS3 for sure, and Nintendo will release their system around the same time. The competition will be even stronger becasue I expect that sales figures for games will go down; but it won't result in price increases for new releases in such a competitive environment, it will then in all likelihood result in increased bankruptcies of smaller developers and the reduction of development costs for games because there is leeway to do so. This is a educated guess and speculation, it will depend on a lot of other uncertain things.

[Captain Wrong]

I think you left out a voting choice

X Because dumb people are willing to pay it.

Bing bing bing!

We have a winner!

I HATE people who whine about the price of new releases and don't seem to get the concept that if you wait about 6 months the price will drop. If you HAVE to get it on release day, you're gonna pay the premium price. Meanwhile, if you sit back and wait a bit, you can not only find out from your fellow gamers if the game sucks or not, but then if you still want it, you can get it cheaper.

(Yeah, I know this is pretty much what Radeon said, but it bears repeating.)


Also, I know this won't be a popular opinion here, but I'd really like to see the "raising the price $10" theory put to the test. I'll admit, I'm siding with zmeston on this one. I think people would grumble and bitch and moan, but they'd still buy the game.

That's the thing...companies don't really care about what consumers say, they care about what they do. When people sit around and complain about the price of games, but they still shell out that cost, the companies can make a comment like "it's not really an issue to the public" and be (at least partially) correct about it. If they noticed a huge drop off in sales, then they would say "ok, the public has a problem with this" because if people actually stopped buying their games that would indicate there is a real problem as opposed to complaining about it which indicates it is a problem gamers are willing to live with.

I know I've said this a million times in a million other threads, but people seem to confuse complaining about something with doing something about it. Complaining means nothing if you continue to buy into whatever it is you're complaining about. However if you take actions to change what you're complaining about (in this case stop paying $XXX for games), then the companies will listen.

And do I really think if the next Grand Theft Auto came out at $60 instead of $50 it would result in lower sales? No I don't. Do I think people would bitch about it? Yes, I do. Will they still pay the money? Yes, they will. Sure I think some people will probably wait, but for the most part I don't see something like that hurting Rockstar in any way at all. The number of people actually willing to put their money where their mouth is would not be enough to prevent a company from raising the price $10.

Ok, off the soapbox. :)

[zmeston]

@zmeston:
I'm glad that you showed flexibility in at least some issues;

I've never said I'm unwilling to admit when I'm wrong. That's why I debate in the first place -- to see if I'm talking out of my ass. Or to avoid doing any real work.


But you still hold adamantly to your first conviction that a price increase doesn't matter, or now, at least it doesn't matter ‘so' much. A $10 increase matters!!! Otherwise, we would have had this increase for over a year now, trust me. Consumers are overall very rational...when it comes to the pocketbook and you have choices, even the loyal fanboys admit their limits.

My conviction is that a jump to $60 for triple-A stuff is inevitable, for a number of reasons, and that it won't have a punitive impact on the industry. In essence, I agree with the article that sparked all our rambling.

Indeed, the price hikes NEED to happen for the industry to survive, at least in its current state. Game development on the PS2/Xbox/Cube is exponentially more expensive than it was on the PS1/N64. Costs are going to explode again with the PS3/Xbox 2.

If anything, the industry would be MUCH better served to linger on the current generation of hardware, rather than releasing new consoles in '05, but that's another issue.


At least you say now that the "very poorest" of the gamers would bail out. Nope, not only the very poorest would do that.

I'm a freelance writer. I AM the very poorest. And I'd still lay down $60 for the next GTA. That's why I'm confident in my opinion that $60 won't chase the unwashed masses away. (Well, that and triple-A games in the cartridge era used to cost $60-80, so there's a precedent for the price hikes, but again, another issue.)

I firmly believe that a handful of triple-A titles -- which are the only games that most consumers buy -- would sell equally well at $60 as at $50. But we need to wait for a publisher to give us a non-SOCOM (or non-PS Lunar 1 and 2) example.


...and if you refer to grumbling stock holders of MS, do you expect there won't be a Xbox 2?

Oh, of course there'll be an Xbox 2. But I disagree with your assumption that Xbox 2 will close the gap, even if launched first, and I believe that the grumbling will get louder as the red ink continues to flow, forcing Microsoft to radically alter its strategy (if it doesn't already plan on doing so with the Xbox 2) or get out of consoles.

Also, the Xbox and Xbox 2 will never ever EVER be successful in Japan, but once again, that's another issue.

Hey, what about the second-sequel rule? I was hoping you'd give some examples to counter mine.

-- Z.

[Ed Oscuro]

All that said, I'd hate to shell out $120 (current dollars) for PS4 games. Yikes.

I would for another Morrowind, if they got everything fixed...man, that game was great, even with the horrendous bugs made worse on my XBOX version. Hee.

[SoulBlazer]

I very often get games on release day, but that's because I'm a impatient person. :D

Plus if I don't like the game I can just turn around and sell it on Amazon and get almost all of my money back. What have I lost? A few dollars.

But it will be curious to see, when Nintendo, Sony, and Microsoft release their next consoles, what the average price of their games are.